Revenue and Leases (Agenda Papers 12A–12B)

Background

In this session the IASB and the FASB were informed of the respective implementation support activities undertaken regarding revenue recognition and leases.

The IASB presentation (Agenda Paper 12A) points out why the IASB supports implementation and what support activities are in place for IFRS 15 and IFRS 16, including Interpretations Committee discussion and webinars.

The FASB presentation (Agenda Paper 12B) contains an implementation timeline for the Revenue Standard and an overview of how implementation is supported. As regards the Leases Standard, the presentation describes which implementation-related standard-setting activities have been undertaken in the recent past.

Staff recommendation

As this session is intended only to educate the boards, there are no staff recommendations. The staff ask the boards whether they would like any additional information on the implementation activities and if they have any comments or ‘lessons learned’ from the implementation of those activities.

Discussion

On revenue, a FASB member confirmed that the implementation works well as there were no major issues in Q1 of the first year of implementation and it seems that the cost has not increased by the implementation. There are also no known inconsistencies between industries.

On leases, there was discussion about the FASB’s practical expedient for not having to separate non-lease and lease components. There was also discussion about the disappointment regarding the application of disclosure requirements on IFRS 9 and IFRS 15 in practice and that it might be similar for IFRS 16. This disappointment was not shared to the same extent by FASB. There were mixed reviews in the US, but some preparers have applied the requirements very well.